House Republicans approve 2013 budget proposal

Published: Friday, March 30, 2012 10:40 a.m. CST

By Lisa Mascaro — Tribune Washington Bureau

WASHINGTON (MCT) — In a vote that will help define the Republican Party in this election year and beyond, the GOP-led House approved a 2013 budget that would cut taxes for the wealthy, revamp Medicare and slash federal spending.

Thursday’s 228-191 vote, mostly along party lines, will fuel the robust debate that is playing out not only in Congress but also on the campaign trail. Republican presidential candidate Mitt Romney has embraced the GOP proposal, which is sharply at odds with President Barack Obama’s blueprint that includes higher taxes on the wealthy and corporations.

But it is the GOP’s proposed overhaul of Medicare, the federal health program for the elderly, that could provide the greatest contrast between the parties — and have the most lasting political impact.

Republicans want to create a new system under which future retirees would get a stipend to buy health insurance, an approach the GOP says would hold down costs and begin to rein in the deficit.

Democrats argue that, under the GOP plan, the rising costs of health care will simply be shifted to seniors, who will end up paying more. No Democrats voted for the bill, and the White House immediately attacked it.

“House Republicans today banded together to shower millionaires and billionaires with a massive tax cut paid for by ending Medicare as we know it,” said White House press secretary Jay Carney. He said the vote shows “the Republican establishment grasping onto the same failed economic policies that stacked the deck against the middle class and created the worst financial crisis in decades.”

Republicans, who watched their approval ratings slide last year when House Budget Committee Chairman Paul D. Ryan, R-Wis., came up with a similar budget proposal, nevertheless decided to double down on their political strategy, believing that their proposal gives voters a clear choice this fall.

They say their budget is the only one that seriously tackles the nation’s $11 trillion public debt load, which nonpartisan budget hawks have said is at alarming levels. That debt would grow to $18 trillion under Obama’s plan.

Republicans are betting that worries about red ink will motivate voters as in 2010, when the tea party helped propel the GOP to the House majority.

Democrats, however, believe voters are now more concerned about jobs and rising income inequality.

“Our team actually went and made the tough choices — tough choices to preserve freedom in America and deal with our fiscal nightmare,” said House Speaker John A. Boehner, R-Ohio. He called the document “a real vision of what we were to do if we had more control here in this town.”

Neither the House Republican budget nor the one from the White House will be approved by the politically divided Congress; both represent campaign manifestos rather than blueprints for governing.

“This represents a gamble,” said Steven Smith, a political science professor at Washington University in St. Louis. “The gamble is that a majority of the public will prefer a deep deficit reduction and tax cuts, which the public likes, to the preservation of key domestic and defense programs and tax cuts for the rich, which a majority of the public also likes.”

A more immediate threat of government shutdown could emerge when the new fiscal year begins Oct. 1. The House budget sets a lower level of federal spending than House leaders and the White House agreed upon during last summer’s tense debt ceiling deal.

The steeper spending reductions were needed to win conservative votes in the House from lawmakers who rejected that summer deal.

The Ryan budget would slash federal spending, including for college Pell grants, food stamps and Medicaid for the poor and disabled, and would shift required Pentagon cuts brokered with the debt deal to non-defense accounts.

Analysts say the wealthiest would benefit disproportionately from the proposed tax cuts, which would cap individual and corporate tax rates at 25 percent — down from today’s 35 percent brackets. Republicans say tax cuts lead to investment and job growth.

Even with steep spending reductions, deficits would continue under the Ryan budget, totaling $3 trillion over a decade — but half as much as $6 trillion from the president’s plan.